Bitcoin dropped below the $77,000 level over the weekend as rising U.S. Treasury yields sparked a broader risk-off move across global markets, leading to more than $672 million in crypto liquidations in just 24 hours. The decline marked Bitcoin’s lowest level in roughly three weeks and reflected growing pressure coming not from crypto-native issues, but from instability in traditional financial markets.
Bond Market Turmoil Is Hitting Crypto Through ETFs
The main catalyst behind the sell-off was a sharp rise in U.S. Treasury yields. The 10-year Treasury yield climbed to approximately 4.63%, its highest level since early 2025, as investors reacted to inflation concerns, geopolitical tensions, and fading expectations for Federal Reserve rate cuts. Analysts say the relationship between Bitcoin and macro markets has evolved significantly due to institutional adoption and spot ETFs.
According to Diego Martin, CEO of Yellow Capital:“Geopolitical shocks no longer hit crypto directly… they hit Treasury yields, which hit risk appetite, which hits ETF flows, which hit Bitcoin.” That institutional transmission mechanism is becoming increasingly important as more traditional capital flows into Bitcoin through regulated investment products.
ETF Outflows Reached Their Worst Level Since January
The market weakness coincided with a major reversal in spot Bitcoin ETF flows. Data from SoSoValue showed U.S. spot Bitcoin ETFs recorded roughly $1 billion in weekly outflows for the week ending May 15, marking the largest outflow week since late January. The previous week had seen more than $620 million in inflows, highlighting how quickly institutional sentiment shifted as bond market stress intensified. This reinforced the idea that Bitcoin is increasingly behaving like a macro-sensitive institutional asset rather than an isolated alternative system.
Liquidations Accelerated the Downside Move
As Bitcoin lost key support levels, leveraged positions across the crypto market began unwinding rapidly. Data from CoinGlass showed total crypto liquidations exceeded $672 million, with long positions accounting for the majority of forced closures. The cascade was intensified by elevated perpetual futures open interest, which left the market vulnerable to aggressive deleveraging once prices started falling. Analysts are now closely watching the $77K level, with some warning that a sustained break below support could open the door to a deeper retracement toward the low $70K range.
Macro Risks Continue Building
Several macro factors are contributing to ongoing market uncertainty:
- Rising oil prices
- Escalating geopolitical tensions involving Iran
- Higher mortgage rates
- Declining expectations for Fed rate cuts.
The bond market has become a central focus because rapidly rising yields tighten financial conditions globally, reducing appetite for higher-risk assets like tech stocks and crypto. This dynamic has become especially important in 2026 as institutional investors now dominate a much larger portion of Bitcoin trading activity.
